TUC research: Public sector pension reforms will hit the lower paid

Government assurances that changes to public sector pensions will not hit low-paid public sector workers earning less than £15,000 a year are misleading, according to research from the Trades Union Congress (TUC).

More than 750,000 public sector employees are earning less than this, the overwhelming majority of whom are women, will have to pay higher contributions.

This, according to the TUC, is because the government measures workers’ income by looking at full-time equivalent pay, not actual pay. For example, someone working half-time on £14,000 a year is considered to be earning £28,000.

The research also showed that 806,000 public sector part-time workers earn less than £15,000 but have full-time equivalent earnings of more than this, and will therefore have to pay the increase in contributions being demanded by ministers.

Of these, 732,000, or 91%, are women. For many, this will mean a 50% increase in the amount paid for their pension.

The government has said that public sector workers earning less than £15,000 will not have to pay any more for their pensions this year, and those on less than £18,000 will see a maximum contribution increase of 1.5% of their pay.

Yet only 16% of public sector workers, around a million, have full-time equivalent earnings of less than £15,000, and will therefore escape higher contributions, said the TUC.

Brendan Barber, general secretary of TUC, said: “Ministers have made much of their plans to protect the low paid. But there is a big catch in their small print, as hundreds of thousands, nearly all women, earning less than £15,000, will face a steep rise in contributions.”